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Nigerian fuel crisis shuts down banks

A bitter dispute over oil supplies continues to hold Nigerians hostage. Fuel shortages have grounded air traffic and are now threatening to cut off cell phone services and shut down the financial sector.

Nigeria is both Africa's biggest economy and the continent's leading oil producer. It seems ironic then that the former should be grinding to a halt because of a fuel crisis. But that's exactly what appears to be happening, as two of the country's biggest banks were forced to close their branches early on Monday due to electricity shortages.

"The current shortage of petroleum products in the country has limited our ability to supply diesel to all our branches in order to continue normal branch operations," Guaranty Trust Bank said in a statement on Twitter.

Union Bank of Nigeria also announced similar measures, shutting down its more than 300 branches nationwide effective 14:00 local time on Monday. Media head Francis Barde said the bank would review the situation on Tuesday.

Running on empty

Nigeria may produce more than 2 million barrels of petroleum per day, but its decrepit refinery infrastructure forces it to import nearly all of the refined fuel it needs to run.

And a bitter dispute between oil suppliers and the outgoing government, headed by defeated president Goodluck Jonathan, has brought the West African nation to a near standstill.

Importers have cut off supplies, saying the government owes them as much as $1 billion (910 million euros) in back payments for fuel and subsidies dating back to October 2014. The government, however, insists it has paid the suppliers, accusing them of holding ordinary people and businesses ransom for the losses they've incurred during the global slump in oil prices.

The months-long standoff has triggered a domino effect, threatening to severely damage the country's financial and political stability. In addition to the strikes, many domestic flights have been cancelled, while international airlines are forced to land in neighboring countries to refuel.

"The whole scenario reeks of sabotage," spokesman Lai Mohammed said in a statement.

"Never in the history of our country has any government handed over to another a more distressed country: No electricity, no fuel, workers are on strike, billions are owed to state and federal workers, $60 billion are owed in national debt and the economy is virtually grounded."

Outoing President Jonathan was defeated in Nigeria's first-ever opposition victory in March 28 elections